In late October 2016, the UAE Cabinet approved the federal budget draft submitted by the Ministry of Finance (MoF) for the fiscal year 2017, with a total spending of AED 48.7 billion as part of the five-year budget cycle 2017-2021, estimated at AED 247.3 billion.
The budget was prepared in tandem with the zero-based budget principles adopted by the UAE, and is consistent with initiatives and projects adopted in the federal government strategy. The financial resources were utilised to achieve the highest degree of prosperity and welfare for citizens and residents through focusing on health, education and community welfare as key pillars for the development of society.
The lion’s share of the 2017 budget, around AED 25.2 billion (51,7%), is dedicated to sectors affecting the lives of UAE citizens, compared to AED 20.7 billion (42%) for government affairs.
Budget allocations are distributed to various sectors as follows:
Social development and benefits valued at AED 25.2 billion, including:
Public and higher education sector at 20.5% (AED 10.2 billion)
Health care and protection of society at 8.6% (AED 4.2 billion)
Pensions at 8.2% (AED 4 billion)
Community development at 6.6% (AED 3.2 billion) for social rights guarantee and social integration programmes to be implemented by the Ministry of Community Development
Housing at 3.3% (AED 1.6 billion). An amount of AED 1.4 billion is assigned for housing grants and loans to ensure adequate housing for citizens
Government affairs sector valued at AED 20.7 billion, including AED 2.1 billion (4.3%) for maintaining clear policies and supporting the UAE’s regional and global relations. There are also programmes for the development of the judiciary and providing distinctive judicial services with a total of AED 824 million, of which AED 297 million was set aside for the programmes of the judicial system and services provided by courts and prosecution offices, with AED 26 million earmarked for the development programmes of legislation and legal services in keeping with the best global practices.
Federal projects valued at AED 3.3 billion, including the aforementioned amount of AED 1.4 billion for projects under the Sheikh Zayed Housing Programme, in addition to:
AED 891 million for federal ministry projects
AED 771 million for the development of power and water projects to be implemented by the Federal Electricity & Water Authority (FEWA)
AED 13.5 million for the projects of the Ministry of Education
AED 215 million for establishing police and civil defence centres, and headquarters of naturalisation and residence, and science laboratories
AED 2 billion to support government innovation, through the establishment of the Sheikh Mohammed bin Rashid Al Maktoum Fund to Finance Innovation. It will
provide financing solutions for innovators and incubation support to turn their ideas into projects that will support the national strategy for innovation and achieving the goals of the UAE Vision 2021.
The general federal budget is prepared according to the zero-based budget model, which is based on a medium-term strategic operational plan that aims to monitor government financial performance, achieve the developmental objectives and avoid over-expenditure or wasting of public funds.
In the budgeting process, MoF was keen to have access to real cost through measuring the financial impact of all government activities from the beginning and comparing them to the cost of similar activities undertaken by other entities in the public and private sectors. The ministry also worked hard to enhance performance by following best local and global practices in order to achieve a positive impact on society with government spending and attain the highest returns possible.